4.4. SR 03-17-2003 - Laserfiche WebLink

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MnDOT vs. Anton, Lubov The MnDOT and Anton, Lubov studies differ on only four points. Discount rate The Anton, Lubov study uses a real discount rate of 2.5%. This is the value currently recommended by the OMB in Washington in its Circular A-94 as being the appropriate real discount rate for projects of this length. MnDOT had used a rate of 4.5% which had the effect of reducing the value of both future costs and benefits. Changing to the rate used by Anton, Lubov raised the present value benefits by $81 million and the present value of total costs by $43 million. Cost of connection to Hiawatha LRT The Anton, Lubov study adds in the $24 million of capital cost needed to connect the Northstar line with the Hiawatha LRT as required by FTA for its financing. This raises the capital cost from $278 million to $302 million in 20075. Time saved by commuters in autos The Anton, Lubov study adds in a conservative estimate of the value of the time saved by drivers who remain on the road after roughly 5,000 people per day switch to the train. The ALA study assumes initially that 6,000 drivers a day save three minutes on both their morning and evening commutes. After 15 years those number rise to 9,000 drivers saving 8 minutes each way. Given traffic volumes and projected speeds, we believe that these numbers probably significantly understate what a more detailed traffic simulation would show. This calculation adds $59 million to the present value of benefits. Saved parking costs The MnDOT study included $18 million in benefits from the avoided cost of not needing to build additional parking spaces in Minneapolis as a result of fewer commuters driving to town. Anton ,Lubov took an alternative approach and estimated, instead, the saved parking costs for individuals over 15 years and present valued that stream. This added $35 million to benefits. Table 6 below includes these effects. 13